City utility service offers value for money: audit

Red Deerians are getting their money’s worth on utilities, according to an independent external audit report presented to city council on Monday.

But Coun. Chris Stephan called the $150,000 independent review a huge waste of money because there were no cost savings recommendations.

“I am sorry but that’s a bunch of garbage,” said Stephan. “I look at this whole value for money and I think what a waste.”

Stephan said the Value for Money Audit was more a “Tell us what we want” audit. Stephan said the audit was extremely disappointing in that there was not at least one cost saving measure identified.

The Value for Money (operational review) on water, wastewater and electrical highlighted 87 areas of improvement, of which 27 were developed into priority areas.

Council voted 8-1 to adopt the report as a planning document. Stephan was opposed.

The specific recommendation that relates to city council is “clear rate-setting philosophies should be identified and prioritized.” These responsibilities were completed when the utility policy was established in October 2012.

“There are a couple of areas that we can be more operational effective and more transparent for our public,” said Coun. Tara Veer, audit committee chairperson. “And those areas are underway. As an audit committee, it was a good exercise for us to go through. … Perhaps in the future we may take other areas of the operation where we also externally go through a similar practice to ensure the people are getting good value for money in the city.”

The city is switching from a fixed usage fee to a consumption-based model, where customers will pay only for what they use.

In order to mitigate “rate shock,” council adopted a phased-in approach over five years within its utility policy.

Annual reporting provisions and a five-year policy mandatory review were also built into the policy.

In January 2011, city council approved $150,000 for the Value for Money audit with its initial focus on utilities. The intent of the audit was to assist in establishing baselines for measuring performance, efficiency and effectiveness from both a financial and operational perspective.

Veer said they chose an area that they knew was one of substantial public interest and there were some performance benchmarks already in place. She said the committee has tried to shift beyond the provincially legislated requirements of an audit committee and move more into best practices to become a fully functional audit committee.

“We felt it was a good place to start,” said Veer. “We felt a sense of responsibility to the public to ensure we are getting value for money on our utilities. Essentially the public can be reassured according to the independent external audit that the people are getting good value for their utilities.”